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Supreme Court ensures much of health law lives another day

The act's key and controversial mandate provision is valid as a tax, the majority decides

By David G. Savage / McClatchy Newspapers

LAST UPDATED: 02:12 a.m. HST, Jun 29, 2012

WASHINGTON » Led by a chief justice who some conservatives immediately branded a turncoat, the Supreme Court upheld most of President Barack Obama's health care law Thursday, resolving a high-stakes constitutional clash not seen in decades and handing Obama a victory that surprised many in Washington.

Chief Justice John G. Roberts Jr. and the four liberal justices joined to uphold the Democrats' most ambitious social legislation in a generation.

The unpopular requirement that nearly everyone buy health insurance or pay a penalty — likened by detractors to a rule that everyone purchase broccoli — was unconstitutional as a mandate, Roberts said, but valid as long as it was simply considered a tax.


Lots of big changes in the 2010 health care law have yet to take effect. Here's how they are to unfold:


» Payroll taxes rise for individuals making more than $200,000 a year and couples above $250,000. These people are also hit with a 3.8 percent tax on investment income.

» A 2.3 percent excise tax begins on sales by medical-device makers.

» Taxpayers must spend more on unreimbursed medical care before claiming itemized deductions.

» Start of program to encourage creation of nonprofit, member-run health insurers in each state.


» Almost everyone required to be covered by either private or government-run insurance or pay a penalty to the IRS.

» Most employers face penalties if they don't offer coverage to their workers.

» Insurers prohibited from rejecting people with medical problems or charging them more.

» Insurers can't charge women more than men.

» Medicaid program for the poor expands in states that take part: It covers childless adults for the first time. And it takes in people with incomes up to 133 percent of the federal poverty level, or $29,327 a year for a family of four.

» Newly created, state-based insurance markets make it easier for individuals and small businesses to find affordable coverage.

» Subsidies help many people, including some upper-income families, buy coverage through the state markets.

» Tax credits to help pay for health plans at businesses with 25 or fewer workers reach their maximum. For businesses with 10 or fewer employees, the credits will cover 50 percent of the cost of premiums.

» New fee on health insurers begins.

» New limits on savings in flexible spending accounts begin.


» A 40 percent tax on high-cost, employer-sponsored health plans begins. The tax falls on plans worth more than $10,200 for individuals and $27,500 for families.


» The gap in Medicare's prescription drug coverage, known as the "doughnut hole," is fully eliminated after years of phase-out. After that, seniors will pay 25 percent of the cost of their medications up until Medicare's catastrophic coverage kicks in.



» Copayments for preventive care for all ages have been eliminated.

» Young adults can stay on their parents' insurance up to age 26.

» Insurers can't deny coverage to children with health problems.

» Policies can't limit how much they'll pay over a person's lifetime.

» Older people save money through improved Medicare prescription benefits, which are phasing in through 2020.

» A temporary program helps people with pre-existing health problems get coverage.

Source: Associated Press


"We do not consider whether the Act embodies sound policies," wrote Roberts, a conservative appointed to the court by President George W. Bush in 2005. "That judgment is entrusted to the Nation's elected leaders. We ask only whether Congress has the power under the Constitution to enact the challenged provisions."

Obama, who had staked the success of his presidency on passage of the law, initially thought he had lost when Fox News and CNN incorrectly reported the mandate had been struck down. But after he retreated to his offices to ponder his defeat, White House counsel Kathryn Ruemmler walked in to give him the thumbs-up.

"First, there were dark clouds," one aide said, "and then there was joy."

Obama's first call was to Solicitor General Donald B. Verrilli Jr., who had insisted on presenting the tax argument to the justices.

Later the president went before television cameras to pronounce the ruling "a victory for people all over this country whose lives will be more secure because of this law and the Supreme Court's decision to uphold it."

Republican presidential candidate Mitt Romney, who also awaited the court's decision in Washington, used the ruling as a call to arms.

"Our mission is clear. If we want to get rid of Obamacare, we are going to have to replace President Obama. My mission is to make sure we do exactly that," Romney said, standing behind a lectern decorated with a sign that proclaimed "Repeal and Replace Obamacare."

But the decision was not a total victory for the administration. One part of the law would greatly expand Medicaid to cover an additional 17 million low-income persons. Although Washington would pay nearly all the extra cost, states ultimately would pay a small portion of the bill.

Roberts said the required expansion of Medicaid would violate the rights of states by threatening them with the loss of all their Medicaid money if they refused.

"The states are given no choice in this case," Roberts wrote, likening the requirement to "a gun to the head."

Instead, Roberts wrote, states must be given the right to opt out of expanded coverage. That raises the likelihood of a wide gap in coverage between states with Democratic majorities, which are already eager to cover more residents under Medicaid, and conservative states which are likely to say no, even if it means turning down large amounts of federal money. Already on Thursday, some Republican governors were saying they would opt out.

Overall, the new law, which already is being phased in, will require insurers to offer coverage to all, even those who have serious diseases. And it will require those who can afford it to carry "minimum" coverage. Republican state officials sued to strike down the law before it could take full effect, arguing this insurance "mandate" amounted to an unprecedented and unconstitutional overreach by the Democrats.

Justices Ruth Bader Ginsburg, Stephen Breyer, Sonia Sotomayor and Elena Kagan joined Roberts to form the majority, but said the mandate was constitutional even without considering it a tax.

Justice Anthony M. Kennedy, normally the court's swing vote, found himself in the unusual position of speaking for the four dissenters in a major case. They would have thrown out the entire law.

Speaking in harsh tones, Kennedy said the court majority "regards its statutory interpretation as modest. It is not. It amounts to a vast judicial overreaching. It creates a debilitated, inoperable version of health care regulation that Congress did not enact and the public does not expect." Justices Antonin Scalia, Clarence Thomas and Samuel Alito Jr. agreed in the joint dissent.

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wiliki wrote:
Great news that people will be covered for serious illnesses in the future. This is an important result of the bill....
on June 29,2012 | 02:11AM
tiki886 wrote:
Sort of like ignoring the costs of rail. I see how you think.
on June 29,2012 | 08:24AM
wiliki wrote:
Nope... we have a sound financial plan for rail. We're going in the right direction for health care....
on June 29,2012 | 06:26PM
tiki886 wrote:
Sort of like ignoring the costs of rail. I see how you think.
on June 29,2012 | 08:25AM
kuroiwaj wrote:
The U.S. Supreme Court exposed the Obama Care law for what it is, a huge personal Federal tax increase on all the citizens of the United States. Gotta read the details of the Decision to see what will happen to all of us, especially here in Hawaii.
on June 29,2012 | 07:19AM
wiliki wrote:
Taxes from which we benefit are good. It's an investment in our future when we can drop health care costs and be a healthier people.
on June 29,2012 | 06:25PM
Pacej001 wrote:
“It is not our job to protect the people from the consequences of their political choices.” From the Roberts decision. So, Mr. Obama has won a short term victory. Congratulations. And those who think that this looming government bureaucracy will improve health care. Enjoy yourselves. Meanwhile, a majority of the American population believes that we've just compounded a massive mistake by upholding a law fraudulently cast as being supported by "penalties" which, constitutionally, can only be seen as a tax. So, now, unless the election in Nov. ejects Obama, we have a huge extension of a broken, bankrupt system for delivering medical care, a retro version built on a foundation of panels and boards and bureaucrats that see people as numbers, not patients. So, unless overturned by election, begins the long degeneration of medical care into rationing and limited care that has given most of Europe significantly higher cancer mortality rates than the US. What will not end with this law is the ineffective, costly delivery of medical care without individual responsibility. That will just be expanded and, as with every politically driven Federal entitlement, costs will soar and add to our already unbearable debt and unfunded liabilities (now over $60 trillion). So, democrats, be happy in the short term, but in the long run you're directing us toward an even faster fiscal ruin.
on June 29,2012 | 08:40AM
MariaBetty wrote:
You haters must not live in Hawaii. Hawaii Prepaid Health Care existed long before Obama Care which has worked well here. Like the POTUS said its not a political victory but America's victory. Republicans continue to divide and hate because none of the programs which have uplifted our lives were their ideas (SS, Medicare and Medicaid). Their tipping point would call their fellow conservatives turn coats. Our Supreme Court has demonstrated they can work across the aisle and I hope the rest of Washington can too.
on June 29,2012 | 09:09AM
Pacej001 wrote:
Haters? Strong stuff coming from the party that blamed Republicans for the Giffords shooting and claim that R's want us to breathe polluted air, to leave our autistic children untreated, and push grandma over the metaphorical cliff. Conservatives, rather than being "haters" are focused on rationally thinking our way through problems. For the most part, this is not a liberal trait. Liberalism is about feelings, emotion, and striving to achieve an unreal world, one in which human nature and simple math don't have to be considered. It's the imaginary, state of utopian existence you're trying for and it flat out won't work. In a conservative's world you have to pay for what you get, either through work or individual responsibility. You mention the uplifting programs, SS, Medicare, Medicaid---- they are all in the red and heading the country toward bankruptcy. The level of taxation to keep them and the country solvent will crush our economy. How do you think Obamacare, or any other entitlement, will work out if we go the way of Greece, Italy, Spain, or Argentina? The answer is that our entitlements won't mean spit if our economy and currency are broken and that's where we're headed.
on June 29,2012 | 09:44AM
HazieMae wrote:
Starting phony wars will do that to an economy, yes?
on June 29,2012 | 12:12PM
false wrote:
Well, Afghanistan was definitely not a phony war. We were attacked way back in 2001, remember, 3,000 dead? Iraq, mistake, but not phony, but even these two wars, the cost of which amounts to about $1.5 trillion, represent a pretty small part of our current overall unfunded liability which is well over $60 trillion. Also, the wars had nothing to do with the housing bust/bank crisis. And guess what our national debt, now $15trillion is projected (Obama's own figures) to grow to $25 trillion ten years. I actually don't think that will happen because long before that we will have a debt crisis that will rip the guts out of our economy and the entitlements that liberals dream (but not think) about.
on June 29,2012 | 01:37PM
64hoo wrote:
plus add the 2 trillion dollors that the obama care will cost us.
on June 29,2012 | 11:07PM
64hoo wrote:
not no more forget about are healthcare here in hawaii and medical association because all companys will have togo with the government control healthcare bill,if not they will be fined a penelties until they join a be under government control just think about being under government control obama care you have to pay for medical coverage non american citizens or otherwise the government will have access to accounts and get into your lives if you don't believe me go to google and typed in government healthcare bill H.R.3200 and scrool down to where it says the truth about healthcare and watc the 10 minute video and you won't like what you see. they cannot make changes because the bill as it was signed stands because they should have before they passed because if they decide to make changes obama it is unconstitunel to make changes as the supreme court that it is constituional. so there nothing can change unless somehow they house and senate repeal it because if they can't if the obama administration c annot make any changes after its been ruled leagel. if he does that can be ruled illegal so watch the film and pray that somehow they get rid of some of the stuff thats in there or get rid of the whole obamacare.
on June 29,2012 | 10:32PM
Coldwater wrote:
on June 29,2012 | 02:16PM
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